SFL Offloads VLCC Veteran

Bermuda-based shipowner Ship Finance International Limited has agreed to sell the 2001-built VLCC Front Ariake to an unnamed third party.

Delivery to the new owner is expected later this month, and the net sales price will be approximately USD 20.7 million, including USD 3.4 million in the form of an interest-bearing loan note from Frontline Ltd.

The book value of the vessel is set at around USD 27.6 million, thus an impairment is expected to be recorded in the company’s third quarter results.

Divesting of older vessels is part of SFL’s fleet renewal and diversification strategy.

In July, SFL sold three 2002-built VLCCs to ADS Crude Carriers Ltd, a newly established company in which Ship Finance had acquired a 17 pct interest.

Offloading of older tonnage is aimed at making room for new fleet additions. Namely, over the past six months, Ship Finance took delivery of over 19 vessels with long-term charters, increasing its fixed charter backlog by nearly USD 600 million.

The latest sale leaves the company’s VLCC fleet to four ships, chartered out to a subsidiary of Frontline Ltd.